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Love & Money: Tips to Avoid Financial Conflict
By: Dave Geibel, Senior Vice President and Managing Director, Univest Wealth Management
This Valentine’s Day, couples might be wise to forego the extravagant presents and take the opportunity to get on the same financial page. According to a recent survey by the American Psychological Association, 31 percent of adults with a partner said money is a major source of conflict in the relationship. Most people know that money is a common area for couples to disagree, but few couples take the necessary steps to prevent money conflicts or right the financial ship once it’s blown off course.
Communication is key in any relationship, and it’s particularly important when it comes to money and your marriage or partnership. Here are five tips to help you have a financially fit “happily ever after.”
Discuss your money personality. The world would be an awful boring place if we were all the same, so it’s OK to have different attitudes and philosophies towards money. What’s important is being able to communicate those feelings and to understand your partner’s habits and tendencies. It is important to share your financial background as this often shapes your attitude towards money.
With insight to each other’s habits and feelings, you can make a game plan for handling your joint financial lives. Based on each of your skill sets, designate who will be responsible for paying bills, balancing the checking account and monitoring overall finances. Although one person is responsible for these tasks, both of you need to be informed about the state of household finances and decisions should be made together.
Create shared financial goals. Determine your objectives for both the short- and long-term. Consider each individual’s needs as well as your aspirations as a couple. It is critical to come to an agreement on the big things, like retirement. For example, do you both want to downsize in retirement and focus on travel? Would you like to relocate to a warmer climate during those golden years? You’d be surprised how many couples never discuss their goals for the future. Once you determine your mutual goals, you can create a plan to achieve them together.
Track how you spend money. Take time to assess both your individual spending habits and how you spend as a couple. Compromise is key. If your spouse isn’t a spender, but really enjoys that daily Starbucks, don’t deny them that small luxury. Work the coffee into the budget and reduce spending elsewhere. Collaborate to make a plan that you are both comfortable following.
Never keep financial secrets. Honest and open communication about financial matters is best. For example, keeping large amounts of college debt a secret or hiding a store credit card with high interest rates is financial infidelity which can create feelings of distrust and betrayal. Be honest with your partner so you can conquer money issues together.
Schedule time to discuss your finances. Having a set time to review your finances will ensure that these serious conversations take place, and allow you to regularly review if there is need for improvement. Even though one person is assigned to tackle the financial “chores” like bill paying, that doesn’t mean the other spouse gets a free pass. There needs to be an ongoing conversation to ensure you remain on track to achieve your goals.
When it comes to financial goals and priorities, everyone's situation is different. Advice from a trusted advisor may be helpful in determining the best approach to this complicated subject. Please feel free to contact us at 888-578-0770 to get a conversation started about creating a customized solution.
Investments offered by Girard Partners, a Univest Wealth Management Firm, are not FDIC insured, are not a deposit of or bank guaranteed, and are subject to risks, including loss of principal amount invested.
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